As well as regular meetings with policymakers, trade bodies and industry experts, the Policy & Technical team uses its network of treasurers to make sure it is aware of key issues that treasurers should be aware of. In addition to ad hoc feedback from this network, the team also meets with an advisory panel on a quarterly basis.
So what are we hearing?
- Provisions, Contingent Liabilities and Contingent Assets. Exposure Draft Provisions – Targeted Improvements (Proposed Amendments to IAS 37) The targeted improvements aim to clarify:
- when an entity recognises a provision - including whether and, if so, when an obligation conditional on an entity’s own future actions is a ‘present obligation’ and hence a liability;
- whether the rate at which an entity discounts a provision for the time value of money should reflect the entity’s own credit risk, that is, the possibility that it may fail to fulfil its obligation; and
- whether a provision for an obligation to deliver goods or services should comprise only the incremental costs of fulfilling the obligation or also include an allocation of other directly related costs.
- IFRS 18 — Presentation and Disclosure in Financial Statements. It applies to accounting periods starting after 1 January 2027. It will not change how companies recognise and measure items in the financial statements. However, it will affect the way companies present and disclose information in those statements. It will impact the disclosure of FX gains and losses and may affect covenants and strategies as movements may need to be disclosed against different categories.
- Basel 3.1/ endgame: due in part to the differing timelines being adopted globally for its implementation, regulatory frameworks are diverging. This is of particular relevance as banks domiciled in different jurisdictions are having to implement and therefore potentially pass on the costs of Basel 3.1 at different times, impacting their relative competitiveness.
- IFRS 9 – an amendment has been published to IFRS 9 addressing the challenge of accounting for electricity that is generated from nature dependant resources (e.g. wind) as such supplies can be highly variable. Further details can be found in this useful briefing from PwC: New ‘own use’ and hedging guidance for contracts referencing nature-dependent electricity
- Cost of gilts is increasing due to annuity buy-out schemes and the spread with swaps is widening to unusually high levels.
Policy & Technical
January 2025
